This brief account aims at helping you find out about some of the obscure, or
unclear, aspects relating to the Private Placement Opportunity Programs (PPOP),
also known as Private Placement Programs (PPP), or under other acronyms like
Private Placement Investment Programs (PPIP), etc. There are lots of people who
know something, but cannot grasp the whole picture.

The
following account is based on our personal experience of several years in this
business. To explain the involved matter, we will study it mostly from an
investor’s standpoint and a broker’s standpoint.

Topics

Before
speaking of Private Placement Opportunities (as aforementioned PPO), we need to
realize some basic reasons for the existence of this business. It means that
there is a need to learn some basic concepts about what money really is and
about how money is created and how the demand for money/credit can be
controlled, and that someone can issue a debt note which can be discounted and
sold then resold in an arbitrage transaction (the basic system for running most
of these programs), etc.

The Basic Reasons

To fully understand what it’s all about, there are some basic principles that you
must understand:

Money Creation

The first reason why this business exists is to create money. More money is created
by creating debt. You as an individual can lend out USD100 to a friend and you
can make an agreement where the interest for that is 10%, so that he must pay
you back USD110. What you have done is to actually create USD10, even though
you don’t see that money. Don’t consider the legal aspects of such an
agreement, just the facts. Now, the Banks are doing this every day, but with
much more money. Banks have the power to create money out of nothing. Since PPO
involves trading with discounted bank issued debt instruments, money is created
due to the fact that such instruments are deferred payment obligations (debts).
Money is created out from debt. Theoretically, any person/company/organization
can issue debt notes (don’t look at the legal aspects of it). Dept notes are
deferred payment liabilities.

Example: A lawful person (individual/company/organization) is in need of USD100, so he
writes a debt note for USD120 that matures after 1 year, which he then sells
for USD100 (this is called “discounting”). Theoretically, the issuer is able to
issue as many such debt notes at whatever face value he wants – as long as
there are those that believe that he’s financially strong enough to honor them upon maturity, and
thereby is interested in buying such debt notes. Dept notes like Medium Terms
Notes (MTN), Bank Guarantees (BG), Stand-By Letters of Credit (SBLC), etc. are
issued at discounted prices by some of the major world banks in a very large
amount of Billions USD every day.

Generally speaking they do “create” such notes (debt notes) “out of thin air”, so to
speak. That is, they only have to write the documents. It’s as easy as if you,
as an individual, write a debt note. Now, the core problem: to issue such
a debt note is very simple, but the issuer would have problems in finding a
buyer, unless the buyer “believes” that the issuer is financially strong enough
to honor that debt note upon maturity. Any bank can issue such a debt note,
sell it at discount and promise to pay back the full face value at the time the
debt note matures. But would that issuing bank be able to find any buyer for
such a debt note without being financially strong enough?

An example: If you had USD1 Million, and had the opportunity to
buy a debt note with the face value of USD1 Million issued by one of the
largest banks in Western Europe for let’s say USD-800,000 a debt note that
matures in 1 year, wouldn’t you then consider buying it if you had the chance
to verify it? Now, if a Mr. Smith approaches you on the street and asks you if you
want to buy an identical debt note issued by an unknown bank, would you
consider that offer? As you see, it’s a matter of trust and credibility
only. And now, maybe, you will also understand why there’s so much fraud,
and so many bogus instruments in this business.

Large Debts Instruments Market

As a consequence of the previous statements, there is an enormous daily market of
discounted bank instruments like MTN, BG, SBLC, Bonds, PN, etc. involving
issuing banks and long chains of exit- buyers (Pension Funds, large financial
Institutions, etc.) in an exclusive Private Placement arena.

All
such activities on the bank side are done as “off-balance sheet activities” and
as such, the bank can benefit in many ways. Off-Balance Sheet Activities are
contingent assets and liabilities, and as such the value depends upon the
outcome upon which the claim is based, similar to that of an option.

Off-Balance
Sheet Activities appear on the balance sheet ONLY as memorandum items, and
it’s first when they cause a cash flow that they will
appear as a credit or debit in the balance sheet. The bank does not have to
consider binding capital constraints, as there’s no deposit liability.

Normal Trading – Private Placement

All programs in the Private Placement arena involve trade with such discounted debt
notes in one way or another. And to bypass the legal restrictions, this can
only be done on a private level. This is the reason why this type of trading is
so different from the “normal” trading, which is highly regulated. In other
words, this business can be done and restricted on a private level only (the
private Placement level) that falls down in a special regulation without the usual strict
restrictions present on the securities market.

The normal trading known by the public is the “open market” (as the “spot market”),
where discounted instruments are bought and sold with bids and offers like an
auction. To participate here the traders must be in full control of the funds;
otherwise, they cannot buy the instrument and sell them on. And there are no
arbitrage buy-sell transactions on this market, because all participants can
see the instruments and their price.

However, besides this “open market”, there’s a “closed, private market” where a
restricted number of “master commitment holders” is the inner circle. These
master commitment holders are Trust with huge amounts of money that enter
contractual agreements with banks to buy a certain number of new issue (fresh-cut)
instruments at a specific price during a specific period of time. Their job is
to sell these instruments on, so they contract sub-commitment holders, who
contract exit-buyers.

These “programs” are all based on arbitrage buy-sell transactions with pre-defined
prices, and as such, the traders never need to be in control of the investor’s
funds. However, no program can start, unless there’s enough money behind each
buy-sell transaction. And it’s here the investors are needed, because the
involved banks and commitment holders are not allowed to trade with their own
money, unless they have reserved enough funds on the market-- money that
belongs to the investors which is never used and never at risk.

The involved banks (the Trading Banks) can lend out money to the “trader”, and it’s
typically 1:10, but can during certain conditions be as much as 20:1. So if the
trader can “reserve” USD100M, then the bank can lend out USD1B (actually, the
bank giving the trader a line of credit based on how much money the
trader/commitment holder has, since the bank doesn’t lend out that much money
without collateral, and not depending on how much money the investors have.

So, if a trader says that he must be “in control” of the investor’s funds, then it
means that he’s not one of the “big boys”, but plays on the open spot market.
Lots of different “instruments” are traded. If the trader only needs to reserve
the investor’s funds, and doesn’t need to be in control of the funds, then he’s
trading in this “private market”.

Because lots of bankers and other people in the financial world are well aware of the
open market, as well as being aware of the so-called “MTN-programs”, but are
closed out from the private market, however; they find it hard to believe that
the private market exists.

Arbitrage and Leverage

The real core of the trading and its safety is due to the fact that they arrange
the buy-sell transaction as arbitrage, which means that the instrument will be
bought and sold at the same time with a pre-defined price, and that a chain of
buyers/sellers are contracted, including the exit-buyers who often are
institutions, other banks, insurance companies, big companies, or other wealthy individuals. The
issued instruments are never sold directly to the exit-buyer, but to a chain of
up to 3-7, or even perhaps 50 investors. The involved banks cannot for obvious
reason directly participate in this as in-between buyers and sellers, but they
are still profiting from it indirectly, because they are lending out their
money (with interest) to the trader, or to the investor as a line of credit.
This is the Leverage. Furthermore, the banks profit from the commissions
involved in each buy-sell transaction of debt bank instruments in the trading
circle. Now, the investor’s principal doesn’t have to be used for the
transactions, but it’s only reserved as a compensating balance “mirrored”, if
you will, against this credit line. And this credit line is then used to back
up the arbitrage buy-sell transaction. Now, since the trading is done as
arbitrage, the money (the credit line) doesn’t have to be used, but it must
still be there available to back up each and every buy-sell transaction. Such
programs never fail because they don’t start before all actors have been
contracted, and each actor knows what role to play and how they will profit
from the transaction. This is the real type of PPO’s!

A trader that is able to do leverage is able to control a credit of typically 10
to 20 times that of the principal, but even though he’s in control of that
money, he’s not able to spend the money. He only needs to show that he has the
money and that he’s in control of the money, and that the money is not used
somewhere else at the time of the buy-sell transaction. The money is never
spent. And the reason is that the trading is done as an arbitrage transaction.

Let me present an example:

Let’s say that you’re offered the chance to buy a car for USD30K, and that you also
find another buyer that is willing to buy it from you for USD35K. If the
buy-sell transaction is done at the same time, then you don’t have to spend
USD30K, and then wait to earn the USD35K since it can be done at the same time
you cash in USD5K in profit. However, you must still have that USD30K and prove
that you’re in control of it.

Arbitrage transactions with discounted bank instruments are done in a similar way. The
involved traders never spend the money, but they must be in control of it. And
the investor’s principal is reserved directly for this, or indirectly, in order
for the trader to leverage.

Confusion
is rife because most seem to believe that the money must be spent. And even
though this is the traditional way of trading – buy low and sell high, and also
the common way to trade on the open market for securities and bank instruments,
it’s possible to set up arbitrage transactions if there’s a chain of contracted
buyers.

You can also realize now why in these Private Placement Programs, the investor
funds are always safe without any trading risk, or whatever
other risk, except for the normal bank system risk (a bank can still
virtually go bankrupt!!!)

High Yield

Usually these programs get a very high yield if compared with the common yield
reachable with the traditional investments. Most people do not believe that a
yield of 50%-100% per week is possible. It is again a problem of knowledge of
working programs and this example can shed some light on the matter:

Assume a leverage effect of 10:1, which means that the trader is able to back each
buy-sell transactions with 10 times the amount of money that the investor has
in his bank account. Let’s say that the investor has USD10M, so the trader is
able to work with USD100M. Now let’s assume that the trader is able to do one
buy-sell transaction per day for 3 days per week for 40 banking weeks (that’s 1
year), and that the profit is 5% in each buy-sell transaction. That makes
5%x3=15%, and with the leverage effect, the profit will be 10 times as high, or
150% per week. Then this return will be split between the investor and the
Trading Group (for projects), but the final net yield for the investor will
still be a double-digit weekly yield!! Bear also in mind that the above example
can be still seen as conservative because tier one level Trading Groups can get
a much higher single spread for each transaction as well as a markedly higher
number of weekly trades enhancing considerably the final yield!! I understand
that such a high yield might seem ridiculously high, but that is because it’s
compared to traditional ways of investment and trading.

Investor

The involved investors (the Program’s Investors) are not the end-buyer in the
chain, but the real end-buyer are financially strong companies who are looking
for a long term and safe investment, like personal funds, trusts, insurance
companies, etc. And because they are needed as end-buyer, they are not
permitted to participate “in –between” as investors. The investor who
participates in a Private Placement Investment Program is just an actor in the
picture amongst many other actors (bank funds/insurance, etc, trading groups as
traders/ commitment holders, intermediaries/brokers) who gets the advantage to
benefit from this trading. The investor usually does not see most of the actors
involved in the process, because he will deal with brokers, Trading Groups /
Traders and trading Banks only.

Programs Structure

Usually, a trading program is nothing other than a pre-arranged buy-sell transaction of
discounted banking instruments made as an arbitrage transaction. Virtually, an
investor with large amounts of funds (on the level of 100M-500M USD) could
arrange for this own program by implementing for himself the buy-sell
transaction, but in this case he needs to gain control of the whole process,
making contract with the Provider banks for the bank instruments and at the
same time for the exit buyers. This is not a simple task at all considering
that there are many FED restrictions to be passed, and at the same time, it is
very difficult to get the strong necessary connections with the related parties
(the issuing banks/providers for the bank instruments and the exit-buyers).

For an investor, it is much simpler (and usually more profitable) to enter a
program where the Trader with his Trading Group has already everything in place
(the issuing banks, the exit-buyer, the contracts ready for the arbitrage
transaction, the line of credit with the trading banks, all of the necessary
guarantees/safety for the investor, etc.) and the investor needs only to agree
with the contract proposed by the Trader, forgetting about any other underlying
problem.

Another advantage for the client is that he can enter a program with a substantially
lower amount of money against the case to proceed by himself because he will
take indirectly advantage of the line of credit of the Trading Group.

Non-Solicitation and Non-Disclosure

As a direct consequence of the Private Placements environment where this business
has to take place, a non-solicitation regulation has to be strictly followed by
all of the involved parties. This factor strongly influences the way the
parties, and actors can deal each other, and the way they can make contact.
Sometimes, this fact can also be the cause of the origin of scams (or attempts
to scam), due to the fact that at an early stage, it is often difficult for the
investors to realize if they are really in contact with a reliable source.

There is another reason why so few experienced people talk about this transaction:
virtually every contract involving the use of these high-yield instruments
contain very explicit non- circumvention, as well as non-disclosure clauses
forbidding the contracting parties from discussing any aspect of the
transaction for a period of years. Hence, it is very difficult to locate
experienced contracts who are both knowledgeable and willing to talk openly
about this type of instrument, and the profitability of the transaction in
which they figure. This is a highly private business; not advertised anywhere,
nor covered in the press and not open to anyone, but the best-connected, most
wealthy entities that can come forward with substantial cash funds.

How Banks and Brokers Can Earn

Banks are not allowed to act as investors in such programs. However, they are able to
profit from it indirectly in different ways, first by getting large commissions.
This fact permits some private entities like brokers, trading groups, and
private investors to take part in this business that otherwise would be a
banking matter only! The private assets coming from private clients are
necessary to start the process. These private, large cash funds are the
mandatory requirement for the buy-sell transaction of banking debt instruments,
and as a consequence, also the mandatory requirement for the programs through
the Trading Groups. Brokers are necessary to introduce the investors to the
trading groups! Thus, each of the involved entities takes their part in the
sharing of the benefits, commissions for banks/brokers, and proceeds for
trading groups/investors.

Projects

Projects are usually involved in these programs. However, the purpose of this type of
trading is NOT to finance humanitarian projects. It’s true that
projects, not just humanitarian projects, can be funded as a result of this
trading, and since this type of trading generates such huge amounts of money on
the market, measures must be taken to keep the inflation low, and one way is to
finance different projects. If too much money is created, the result is
inflation, and in order to be able to continue creating debt, different measures must be
taken to keep the inflation low. One way is to adjust the interest rates.
However, for this kind of trading, this is not possible; it has little or no
effect. A better way is to let some of the profit be used for different
projects that need funding; for instance, to rebuild the infrastructure in
regions of the world that have experienced catastrophes, war, etc., because
that creates jobs for people in those regions, as well as for subcontractors in
the west.

So, the reason for project funding is primarily not to support humanitarian
organizations, even though that also happens, but to fight against inflation.

Process Synthesis

The complete process involving the issuing of debt-notes, the arbitrage
transaction, the programs, the projects, etc. is as a final synthesis a result
of combined market forces: banks have a method of increasing their revenues and
profits, investors are able to finance different ventures, borrowers are able
to access loan funds. There is a supply and demand for such instruments, and as
long as the supply and demand exists, then this kind of trading will also
exist.

Process Summary

As a summary of the process involved for entering a program:

An investor with USD10M and up can be an applicant for a Private Placement Investment
Program.

This business is entirely private. To get access to these investment programs, the
investor needs to send his preliminary documentation to some broker whom
the investor trusts to be in direct contact with the Trading Group. There
is no other way for the investor to make contact with the Trading Group at
this stage.

After the investor has sent his paperwork, the Trading Group will proceed to its Due
Diligence on the applicant, and if the response is positive, and cleared,
then the program manager in the trading group will contact the investor by
phone and/or fax and invite the investor to a face-to-face meeting.
However, usually, if the investor is not willing to travel, everything can
be done by fax, phone, and courier mail. If not cleared, then the program
manager will contact the broker, and then tell him that the investor did
not qualify, and then the broker forwards on that information to the
investor who often gets upset and might discredit the broker and/or
intermediary, maybe on a due diligence message board.

During the contact with the investor, the trader will explain the program’s
terms/conditions, the guarantees, the contract details, as well as the
next step required to start the program. Then, it’s necessary and required
by the program terms, the investor will get
instructions to open a new sole signatory bank account at the Trading Bank
for transferring the funds there. The Trader has prepared everything; so
the investor is able to open the Bank account without delay (because he
has already been cleared). Otherwise, the investor will be invited to
prepare his own bank to block/reserve the funds into his own account at
his own bank for one year without any transfer of money.

The investor will receive a contract which states the total gross yield, the percentage
of the gross profit reserved for projects, the percentage for the Trading
Group, and the percentage for commissions/fees to be deducted for
brokers/intermediaries. The net return to the investor will be wired to
another investor returns account that can be located in any bank
worldwide. If the client accepts the contract, the contract is signed, and
the program is ready to start.

The Trader is now able to leverage the investor’s reserved money 10 times and is now
able to back up the arbitrage transaction with the money, a credit line
that remains in the bank account that is screened before each arbitrage
buy-sell transactions. Trading now continues, and the profit is paid out once
per week (or per day/month, or whatever depending on the program terms, to
the investor. The investor instructs the bank to wire out the commission
part to the broker’s bank coordinates. The program continues the above
loop for each week until the end of the program, usually 40 banking weeks.

The programs can work with cash only. This fact does not mean that the investor
will only be accepted in the case he owns cash. The investor can be accepted by
some Trading Groups also with financial assets like MTN, BG, CD, SBLC, SKR,
etc. that the Trader then will use for getting his own line of credit at the
Trading Bank to run the program. In this case, the investor will have the
advantage of profiting both from the program, and still from the yield coming
from the instrument (i.e. the scheduled interest of a CD, or MTN).

Analysis of Risk Involved in PPO Contracts

Finalizing PPO contracts with investors is usually always a long stressful process because
the involved parties can stumble upon many problems along the way. We will
observe a list of possible problems of behavior from the standpoint of the main
parties involved at the bottom line of the process:

The investor

The brokers/intermediaries

Then there will follow some hints on possible scams, and warning for scams, in this
business.

From the investor’s side:

The applicant investor will not be able to meet “a real trader” in this business
directly, and without the pro per introduction, and such an introduction
requires that the client identifies himself and shows proof that he has enough
money. The main reason why there’s a broker- intermediary chain is because the
people in the “Trading Groups”, I use the term “trading groups” because there’s
always a small group of people that work together and not just a trader, have
no time or interest in meeting all the 99% of people who are just fishing for
information and/or who don’t qualify, because they don’t have enough money, or
have useless bank instruments.

If you’re a qualifying investor, then you should try to establish contracts with
brokers/intermediaries, and hopefully they will be able to place you in contact
with a performing trading group. Don’t chase around trying to find “a real
trader”. Most so called traders in the financial world are not involved in this kind of trading, and
those who are, are keeping a low profile, and would never talk with an investor
that hasn’t been cleared first.

When it comes to non-performance, in most cases the problem is on the client
/investor side. The client doesn’t qualify because he doesn’t have enough money,
or the bank in which he has the money is too small, and/or is located in the
“wrong country”, or he cannot move his funds or he has a bank instrument that
cannot be used, or he tries to proceed according to his own procedure and
rules, etc. Most of the client documents I’ve seen over the years have been
useless! Sometimes deals are killed because the broker and/or intermediary
don’t understand what to do. And the worst thing that can be done is to “shop
around”, or trying to find the best deal. It’s better to get 20% per month from
a program that performs, than having to wait for 200% per week from a program
that was supposed to work, but never will. I’ve met brokers and investors that
have chased around for decades without being able to find an open door. And
their main problem is that they had the wrong approach. Remember that the
trading group does not have to give any explanation as to why the investor
doesn’t pass through the clearance. If they already have a first of investors
awaiting clearance, then it doesn’t require much to be put aside to be
disqualified.

Things to remember:

Investors understand what is required to qualify:

A minimum of USD10 Million in cash located in a major bank in Western Europe, USA, Canada or Australia, money that is clear, can be traced back, and has a non-criminal history.

That the investor himself, and the company that he represents can be cleared. For individuals, this is an identity control that the person exists. Note: individuals coming from certain countries will never qualify.

Investors are invited, and might be accepted. They can never demand to be accepted just
because they have lots of money, and/or that they believe they are
prominent people. Most people in the different trading groups are fed up
with such inflated individuals, and are just waiting to find an excuse to
kick them out.

The investor himself must be the one, and only person that the trading group deals
with. He’s not allowed to let his lawyer, or
sister-in-law-who-is-fluent-in English, or whatever person, contact any
person in the trading group, not even the broker. If the investor doesn’t
speak English, and needs assistance, then he must sign a Limited
communication purpose. The investor must still sign the documents.

Investors who have the least money are always placed in the queue. An Investor with
USD100M will get more attention than an investor with USD10M. Investors
who have assets other than cash will also always be placed last in the
queue. This means that sub-USD100M clients must be patient. If they are
told that they will be contacted next week, then they should accept that,
and not take that as an excuse to shop around.

It’s not easy for an investor to be sure that he meets the right people; intermediaries
and brokers who know what to do, and what not to do, and who are working
with a performing trading group. The best he can do is to educate him and
not to be lured by those who claim that their program will give the
highest yield. He must also be patient, and trust the intermediary, or
broker. This one can be the most important initial problem from the
investor’s point of view. However, there’s no way that the investor is
able to come into contact directly with the trade group before he has been
cleared, which requires passport copy + proof of funds. He might be able
to talk with someone in the group, or at least with the broker, once the
required documents have been in, but before he has been cleared he will
not get further.

If the investor, for any reason, is unsatisfied with the broker and/or intermediary, then
he can try another one after having first sent a Cease and Desist order.
In most cases where investors have been blacklisted because they have been
shopping around, it’s their own fault. Brokers/intermediaries cannot be
blamed if the investor is shopping around. And those brokers/intermediaries who once make the mistake of shopping around, will soon be blacklisted as
well.

These are some of the main risks the investor can meet:

Nothing will come out of the trade; no contact and no profit, just frustration
after weeks/months of waiting.

Investors, or their Intermediaries and/or Brokers are “shopping around” with client
documents, which sooner or later will result in blacklisting.

The investor is told that he must move his funds out of his own control to an
escrow account, etc.

The investor is told that he must buy a bank instrument for his money. In the
worst-case scenario, this instrument is a fake, or impossible to use.

The investor is told that he must pay up-front fees, because a leverage of
his funds must be done, or some bank instrument must be discounted, or
banking fees must be paid, etc. The up-front fees paid are lost, and
nothing more will happen.

From
the Broker’s and Intermediary’s Side

There
is a common misuse of such terms as broker, intermediaries, facilitators, etc.
and the fact is that they are not official terms in banking or finance, but
such terms are used within trading groups, and in their communication between
each other. The problem is that it sometimes happens that a broker, or an
intermediary claims that he’s in direct contact to a person with that title,
but that doesn’t guarantee anything, because any person can call himself a
trader, or a commitment holder, or whatever. And since such positions cannot be
verified, at the first stage, such titles can be meaningless as seen from the
investor’s point of view.

There’s
always a chain of trading groups – brokers – intermediaries, and this is for
two reasons: First, trading groups are not allowed to solicit, nor are brokers,
not even intermediaries. However, an intermediary might know an investor with
money, who knows a broker who works in connection with one, or several trading
groups. Secondly, to protect the involved parties on the side of the trading
group, they work through several brokers, and the broker works through several
intermediaries.

As
an additional task of a good broker, he should screen the potential investors
by filtering the most promising applicants, and at the same time, collecting
from them the
right documentation, after a strict checking for the quality, and acceptability,
of the client documentation, in a way that the trading group receives workable
documentation only from the broker.

The
most common risks, or problems, that a broker, an intermediary, or a
facilitator can meet during their own work in this business are:

They need to
get to handle tens and tens of clients before finding a right applicant.

They could get
just a part of the truth regarding the asset of the client at an early
stage that may be discovered later to be unworkable, after weeks or months
of work on it.

They always
have difficulty qualifying themselves with new clients because they cannot
show any past performance, or past contract, and the relationship with the
client is just a matter of trust at an early stage.

There could be
a long list of brokers and/or intermediaries between the client and the
trading group. In this case, some brokers in the middle can destroy the
deal by not giving the right information to the client, or to the trading
group, and/or making problems with the fee agreements.

There could be
several levels involved for the intermediaries: the closest one to the
trading group, also sometimes called facilitator,
is the most important person. This person should have a direct contact with
someone of the trading group. Any other broker beneath the above
facilitator has a lower value in the hierarchy. The broker, and/or the
intermediary, can have problems showing the client his level in the
hierarchy at an early stage.

Virtually
this business could seem very simple! You just need a clear client with funds
for USD10M and up in a Top Bank, a broker in direct contact with a real strong
Trading Group, and a right client who can follow the procedure in a risk-free
position!

However,
from a practical point of view, the above ideal situation is so unusual as to
not equate to reality! First of all, most of the applicant’s clients usually
have some problems with their funds, or they are not in full control of them,
or they cannot, or do not want, to move their assets, or they are not cleared,
or they are not collaborative enough to deal with the Trading Group and/or with
the brokers.

In
conclusion, the broker’s job is a very stressful activity, and any new applicant
could have a hard job in educating himself before getting the right attitude; frustration
and patience are a must here!

Scams

From
time to time you hear about scams, or potential scams, in the High Yield
Investment Programs arena. One of the conditions that facilitate scams in this
business is mainly due to the non-solicitation environment, and the private
approach required that forces information to remain as pure whispered gossip
ready to be expressed aloud at any time. That fact facilitates a diffused level
of ignorance in this matter, where scammers are essentially in their element!

Possible
scams could be:

The
intermediary asks for up-front fees, in a real situation no one will ask for
up-front fees from the client.

You are asked
to transfer the money into an escrow account, not in full control of the
client.

You are asked
to buy a bank instrument against the funds to start the program, that
later will be discovered to be of no value.

You are asked
to pool the funds together with other smaller investors.

The
Internet is now full of different money-making opportunities that promise to
return a high yield on the small investor’s money. In most cases, such programs
are ponsi-schemes/pyramid-schemes. And even if a few
might be managed by honest people who are trying to aggregate enough funds in
order to enter this kind of trading, they are doomed to fail. First we have the
above problem with the USD10M minimum, so there’s no real point in trying to
pool less than USD10M. Then we have the legal aspect of it. In many countries,
it’s illegal to pool money with promises of a high return. Then, we have the
problem with the high number of participants to be managed. Another problem is
the time factor. Unless the program is hyped on the net, it will take years to
aggregate that amount of money. Another problem is the management. How can they
be trusted? And finally, if they manage to aggregate USD10M from thousands of
participants, they will not pass the clearance, because aggregated/pooled money
like that is not allowed to enter trading.

However,
the main scams are usually made, or attempted, with small investors that will
never qualify as PPO investors. Usually, it is very rare that a real wealthy
investor with USD10M and up can fall into this kind of scam. In fact, usually
the larger investors know more about finance, and they can also use many other
financial expects to drive the deal on a “safety road”. So, anyone who is quite
educated in this business can easily discover any of these scam attempts at an
early stage.

Warning
on scams

It
is very common to find on the internet so many web-sites, or message boards/links
to so-called official documents, or reports of the “Financial Authorities”
warning the public that this business “does not exist”, and any of these offers
are always scams. The reports in question could have been written by the SEC,
FBI, ICC, or any of the regulatory authorities. It’s nothing to be amazed
about. You should be aware that official documents like the Commercial Crime
Services Special Report on Prime Bank Instrument Frauds by the ICC Commercial
Crime Bureau are widely spread and used as a reference by banks, accountant
firms, lawyers, SEC, FBI, etc. all around the world. So if ICC says that this
is a scam, and your accountant says that this is a scam, and your banker says
that is a scam, then isn’t it a scam???!!!

You
should all understand that most people that work at banks, securities houses,
accountant firms, etc., have no insight into this kind of trading, and they are
very eager to listen and comply with everything said by the authorities. So if
SEC, FBI and others say that this is all a scam, then they believe so.

For
all you nay-Sayers and disbelievers out there who are looking for evidence that
this kind of trading exist: try to learn and understand monetary history and banking, and you will understand that this can, in fact,
work – in theory. You don’t have to run around and try to find evidence,
because unless you have USD10M to test it for yourself, then you need to rely upon others
who are vouching. So we suggest that you find out the truth yourself, without
listening to what others are saying.

Well,
it’s not a cover-up, that’s for sure, because this is what they are learning,
and this is what they are told by others.

Conclusion

We
have general beliefs that spreading information/knowledge is the best way to
fight the evil, dark side. However, at the same time, we’re very well aware
that it would not be a good idea to reveal everything in this writing, or on
public conference, or forum. This kind of trading can continue because it’s
unknown by the public, and traditional investors. If all wealthy people knew
about it, and also had access funds in legal way, then they would not place
their funds in the stock or market, Forex, or other
traditional risk investments. But knowing about it is not the same as having
access to it!

And
as professionals in this business, we must be extremely cautious when it comes
to sharing contacts. This is also one reason why clients never are able to deal
directly with the facilitators before their funds have been cleared. So
facilitators work with the help of brokers, who work with the help of
intermediaries, and the investors have to help the brokers and intermediaries
in their work for them to get the first advantage to access this world
smoothly!